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WeChat's got a huge base for merchants, but retention's a challenge

How should pure-play e-commerce retailers leverage WeChat mini-app function? Where to find traffic for mini-apps? What kinds of business are suitable for mini-app?

Earlier this year, WeChat’s launch of a mini-app had created a buzz in the e-commerce industry. Integrated into the WeChat app, the mini-app developed by third-party developers can serve as a fully functional app, and users can install the mini-app without complex process through AppStore or Google Play.

Compact, simple and easy to use, the mini-app is great for low-frequency scenarios with a big demand.

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However, for e-commerce retailers, and pure-play e-commerce specifically, achieving sales growth via a mini-app sounds like a distant dream. Mini-apps are still very restricted in terms of in-app marketing, and not everyone can benefit from the "traffic bonus" that mini-apps carry at the moment.

According to third-party researcher ALD (aldwx.com), among top 100 mini-apps in the market, only nine are pure-play e-commerce retailers. Full-category retailers include Pinduoduo and JD.com (Tencent invested in both). The rest of the pure-play e-commerce retailers are heavily combined with offline services, such as JD Home Delivery and Everyday Fresh, both of which focus on fresh food delivery. Overall, retailing via mini-app is not a popular phenomenon.

Among the nine mini-apps, there are three full-category retailers (4, 12, 56); two focus on fashion apparel (5, 37); three provide fresh food delivery service (45, 50, 90); and one is a digital devices and household products retailer (20).

For retailers, WeChat’s hyperactive and massive user base is a goldmine, but mini-apps don't solve retailers' most prominent demand: to acquire and retain new traffic.

ALD’s report shows that many users (36%) find new mini-app through WeChat Official Accounts. Within a WeChat Official Account, users can find the mini-app associated to the account via customized menu bar (59.3%), articles (25.56%), automated messages (11.53%) and profile page (3.18%). Users who find the mini-app via WeChat Official Accounts are likely subscribers of the account already.

If a mini-app owner wants to find new users without relying on existing subscribers, LBS, QR code scanning and payments are the channels to look for, but these would require mini-app owners to have a strong offline presence. For example, the bicycle sharing industry, which has millions of bikes placed on the streets, tagged with unique identification code registered in WeChat. People can access bicycle sharing mini-apps simply by scanning the QR code with a phone camera. Searching, social sharing and QR code identification sounds like a viable solution to acquire new users for pure-play e-commerce retailers, but it can be difficult and costly (if WeChat were to allow SEM ranking for in-app search results in the future).

The mini-app is also a closed system with the purpose to drive users to the transaction. To rephrase this to retail language: If retailers cannot complete the transaction with customers inside a mini-app, they can only make the transaction in another mini-app — they cannot drive customers to an HTML website, or external app with full function because the designers of WeChat mini-app function forbid that to happen. The result is that retailers need to tailor offers at the mini-app: Best sellers, bundles, flash sales and limited-time offers are commonly seen on mini-app retailers. For pure-play e-commerce business, the biggest challenge at the WeChat platform is to acquire new users. Due to the decentralized design, WeChat benefits numerous individual account operators. If businesses are to access more customers, they will need to transact with the online influencers. In this sense, the HTML5 Weidian mini-app and third-party HTML5 are on level ground, because all of them can be leveraged to land traffic coming from online influencers.Although retailing is a popular mini-appp scenario, WeChat’s vision is more than that. We can tell from the ranking of top 100 indexed mini-app that a lot of industries with a focus on offline services can use mini-app to improve the overall experience. Banks, for instance, can leverage mini-apps to accept appointments from customers.

We have discovered an interesting case with Queen’s New Collection, a social commerce app ranked 37th in the list of top 100 mini-app by ALD. The mini-app sells female apparel at 49 RMB, 99 RMB, 169 RMB and 268 RMB, and provides free shipping for every order. After purchasing the products, customers can receive a social bonus if they decide to share their shopping experience with friends. The mini-app was associated with 42 WeChat Official Accounts, which is quite an unusual practice when peer retailers usually own less than three official accounts. By exploiting the feature of the still-evolving mini-app function, QNC could maximize the reach of its services via multiple social media accounts.

To sum up the winners in four groups, they are "Tencent and friends," "traffic landlord," "offline giants" and "social masterminds." These businesses are currently benefiting from the mini-app function.

The mini-app is positioned as a tool to replace apps that are not frequently used, thanks to the convenience of installation and the compact size. But it cannot replace apps. It doesn’t even have the basic function of sending notifications to users. Mini-apps' native functions may not directly help retailers acquire massive online traffic, and for now transacting with major traffic holders inside WeChat platform can be a way for retailers to acquire new traffic.

For e-commerce business that already has mobile-compatible sites, mini-app is not a must have, but it can offer customers differentiated services from the HTML site or the apps. Bear in mind that WeChat’s mini-app is not yet a finished program, and e-commerce businesses should keep a closer look on future updates.